The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Surety,
If you were a hedge fund trying to make money out of the trade, then what you suggest makes a lot more sense ;-)
CFDs are banned in the US because the regulators believe they incentivise manipulation because of a lack of transparency. Make of that what you will.
Whimax,
Your words...
"Nothing dodgy at all imo.
We have had a distressed seller and someone has negotiated a buying of all of their holding in 1 go.
I don’t see why that’s such a stretch. Also nothing to do with tax year.
TR1s in the coming days will tell who has sold and who have bought imo.
We won’t know till the TR1 comes out, but I suspect Covalis imo. They’re only ones I’m aware of with those kind of numbers."
Ianfer,
'Yes it is hard to believe but if you are so confident of a sp you would do it.'
You wouldn't sell your stock if you were confident of the SP going higher, you would fund the margin call out of working capital. Selling the stock, especially 1.5% of the entire share issuance would cause the SP to decline. The CHAR share price dropped to its lowest point just prior to Covalis announcing that it had sold 45% of its holding.
Surety,
'This doesnt quite make sense... assuming we think that Covalis triggered/accelerated the collapse in the first place, partially, by selling down... why would you do that.. and maintain an open CFD position..'
Exactly.
¯\_(ツ)_/¯
Having to sell stock in order to pay for losses on a CFD in the same stock suggests Covalis has no other sources of capital in which to call upon which seems hard to believe.
Not at all. If you're leveraged long a CFD, not only are you under water on the price difference, you are also having to pay the high fees to remain underwater and have to keep paying. Selling stock is only going to make your situation worse. In order to stop losing money, it would be better to sell your CFD and take the loss than keep paying to keep the loss making position open. Also, it would be rather rare for a hedge fund to be long + leveraged long on the same stock, where's the hedging strategy in that?
Like I say, it remains a possibility that Covalis are incompetent traders and are a hedge fund that doesn't hedge, but if you're looking at it from a point of view of where the money would be made from holding stock and CFDs, it would be to be long stock and short price using a leveraged CFD.
Whimax,
The purpose of taking out CFDs is to get leverage (up to 30 times) on price (either appreciation or decline).
Covalis recently sold 45% stock but only 6.5% of their CFDs.
CFDs are expensive, high contract fees need to be paid to keep them open. If Covalis are the distressed seller, as you suggest they are, then why are they opting to sell shares which cost them nothing to hold over the CFD that have a high cost to hold? If they were leveraged long the price of CHAR (via CFD) as well as being distressed financially like you say, then one needs to ask; why are they opting to maintain a heavily underwater leveraged position that's costing them high fees to keep open, whilst selling the no-cost non-leveraged option?
I'm not excluding the possibility that Covalis are just really poor traders who don't know what they're doing, however, if one were to assume that, as a hedge fund, they know how to hedge, having a leveraged CFD open at a lower price than what they hold stock at, then they would be making money.
There's a reason Covalis chose to sell CHAR stock rather than their CFDs, which remained largely unchanged at last disclosure.
We can't be sure what that reason is, although there can't be that many explainations either...
Hard to believe the heresay (which is all it was) about the seller being distressed.
A distressed seller wouldn't take 4.5 months to sell their position(s).
Just because some people repeat 'distressed seller' in every other post, doesn't make it true.
Gooner,
Why are you assuming they are selling at a loss? If you have a leveraged CFD open, then selling shares to lower the price would be making you a bucket load of money.
There could have been a fabled ‘distressed seller’ as rumoured in some social media groups, but as yet, there is no evidence to this being fact. Any such ‘distressed seller’ would also be a terrible trader as to buy anywhere near a 4% position in the company would require buying during the equity raise(s) (18p & 14p). That means they would hold a 14p+ average. To then sell out at 8.25p doesn’t make sense, at least, it doesn’t from a trading perspective (unless of course, you had a leveraged short CFD position on at the same time).
If this were a distressed II then they would likely be beyond the point of being ‘distressed’. Being forced to sell at a -45% loss or more, they’d have to be on the brink of bankruptcy. It doesn’t really make a whole lot of sense, just like being told by an ‘anonymous city trader’ not to buy at the recent lows because of a distressed seller (when this would be the absolute best time to be buying in order to take advantage of an opposing trader who’s ‘distress’ means they need to accept a low price - from you the buyer - for their stock) doesn’t make much sense 🤷♂️
Anyway, whatever the reason the seller had for selling, hopefully this is the end of it and the SP can start finding a more realistic price level without such a dominant player manipulating (intentionally or otherwise) the sell side.
"We are delighted to start working in Morocco, where we hope to repeat our previous successes in the Mediterranean - enhancing domestic production, helping to meet the country's growing demand, with the potential for exports for any surplus supply, and facilitating both energy security and long-term coal reduction," said chief executive officer Mathios Rigas.
https://ir.q4europe.com/Solutions/Energean/3784/newsArticle.aspx?storyid=16063329
Q2 there will be news and updates regarding the imminent onshore Loukos drills.
Q3 there will be news and updates regarding the massive Anchois East drill offshore Lixus.
It's going to be a very busy year for Chariot.
The official Energean sign off would have passed through the hands of a lot of bureaucrats yesterday.
Whimax,
Hardly. I said the guy who had already left was full of BS. And he was. I'll never stop calling BS on BS.
And to say it wasn't what I was saying but the way I was saying it that got me banned makes it sounds like it was some woke group that needed its safe space. Which it very much wasn't. I don't buy that as an excuse in the slightest. The truth is, the discussion and my posts were being deleted as quickly as I was able to write them. For whatever reason, some people in there didn't want the information discussed.
Anyway, it's the groups loss.
GL to the genuine investors still left in there.
I'll leave people with this...
A CFD is not an investment in a public company. They actually have nothing to do with the underlying company at all. They are simply betting contracts or rather bets on a particular shares 'price'. Nothing more. It's akin to betting on a football team, you can bet on a football team to win 2-0 one week and lose 3-1 the next. Betting on a team winning or losing has no effect on the actual teams performance, unless of course, a player in the team is doing the betting (as their performance has a direct effect on the team winning or losing each game).
So say someone or an II holds a long position in a stock and a short position on that same stock in the form of a CFD, if the selling down of their shares were to aid a decline in the share price, then their CFD short would be worth more. If the CFD is leveraged 2, 3 or 5 to 1 (as they often are) then the CFD would be worth a lot more than the loss on their underlying shares sold. You can leverage CFDs all the way up to 30:1.
CFDs can be long or short and they can be long for a period of time and then switch to being short or vice versa. A CFD can be individually written to enable specifics to be added. Looking in from the outside it's a murky world as very little of this information needs to be publicly disclosed to the market, officially or otherwise. CFDs are banned in the US for this reason. Going short on a CFD doesn't need to be publicly disclosed as no underlying stock is being borrowed because it's essentially just a price betting contract.
Could you now imagine how incentivised someone would be to discourage others from buying if they had a leveraged short CFD open? How would they act and participate in the market? Would they be buying more stock or would they be constantly selling their stock in order to push the price down because they've a leveraged bet on the same stock at a lower price that's worth way more than the underlying stock they own?
Whimax,
That's absolute nonsense and you know it. The guy claiming to be getting the inside info and having private lunches with AP and telling people not to buy until he gave the go-ahead had already left the group by the time I claimed it all to be BS. Maybe it's best to just admit - you were one of the people to be well and truely suckered into the BS.
Whilst he was telling everyone in the group not to buy, I made my biggest Char purchase in 3 years @ 7.57p.
Gooner,
It was fairly balanced until it got weird and people started claiming to be calling AP on the phone on an almost daily basis ¯\_(ツ)_/¯
Thebold,
The fact that my posts were deleted as soon as I was booted says it all really.
Over the target.
Selling stock affects the stock price. CFDs don't impact share prices, they only respond to the changes in price.
The fact that they've sold 40% of their shares whilst their CFD position has only changed by 6.4% shows the position they've taken in the company. i.e. it's speculative and hedged and likely short-term.
Also, be careful what you're being fed in Telegram groups. 'Don't buy until I tell you it's safe to buy' should be a massive red flag to anyone invested.
It's funny how, in these share groups, people are immediately kicked out as soon as they question the admins claiming (or supporting those who are claiming) to be having lunches with AP and telling investors to stop buying 'until it's safe to do so' (on his say-so of course). It's straight up boiler room tactics.
It's also a blatant sign of guilt when dissenting voices against such claims are immediately silenced (booted) rather than those propagating the claim(s) having to defend or prove them in any way.
Just be careful and don't believe what anyone is claiming in these groups. They are only claiming to know more than you because they are working through their own trading strategy (rather than, as they claim, trying to help you with yours).
Peace ✌️